UK contactless limit raised to £45 to prevent coronavirus cash handling
The contactless card limit in the UK is set to increase from £30 to £45 from the beginning of April.
UK Finance, the collective voice for the banking and payment industry, announced the changes this week as government grapple with methods to contain the coronavirus.
“The changes were already under consideration by the industry, but the process has been expedited as part of the industry’s response to the Covid-19 outbreak.”
The move is in line with other European countries Norway and the Netherlands, where banks have increased the contactless limit on payments before a PIN has to be entered.
But how quickly this can be rolled out is the big question. Theoretically, the new limit will be rolled out nationwide from 1 April 2020.
The British Retail Consortium’s head of payments policy Andrew Cregan points out that the last contactless limit increase to £30 took two years to implement.
“Given the extraordinary circumstances we face today, this new £45 limit will be rolled out from next week,” he says, highlighting that many shops will “take longer” to make the necessary changes “given the strain they’re under”.
“In the meantime, most customers can continue to make contactless payments for higher amounts using their smartphone.”
Last year £80.5 billion was spent through contactless payments in the UK, up 16% from 2018 according to UK Finance.
Many experts have been speculating whether this temporary shift from cash to contactless payments across the globe is the big nudge some countries need to replace cash with alternative digital payment methods.
Whilst roughly 64% of UK cards are contactless in the UK, only 3% of cards in the US are contactless according to a 2018 study by consultancy A.T. Kearney.
“In the U.S., an event like this is likely to be the trigger point to cause that inflection point, in terms of growth,” Vaduvur Bharghavan, CEO of digital card services platform Ondot, told CNBC last week.
“It starts with a trickle, and then you have an avalanche.”
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